Caribbean productivity declines, Unesco professor warns

POSTED: 06/13/13 5:28 PM

St. Maarten – The Social Economic Council of St. Maarten (SER) held its first annual symposium at the Westin Hotel yesterday under the theme of “Innovate or Deteriorate, Corporate Social Responsibility as the way forward for St. Maarten.” The symposium featured opening remarks by Acting Governor Reynold Groeneveldt, Prime Minister Sarah Wescot-Williams, SER chairman Rene Richardson, keynote speaker, Dr. Ryan Peterson, professor of innovation at the University of Aruba and who holds the Unesco research chair in Institutional Capabilities for Island Innovation, and a panel of guest speakers from a cross section of the island’s social and economic sector for an open floor of questions from the audience. Also present at the Soualiga conference room of the hotel were Minister of Education Silveria Jacobs, MPs Leroy de Weever and Gracita Arrindell, and dignitaries from St. Martin. The event was moderated by radio personality Cedric Peterson.

Acting Governor Groeneveldt commented that the SER “plays an important role in the country.” He said that “economic growth alone cannot lead to sustainable growth” and that “a constant dialogue is needed between social partners.” He pointed to the need for “more structural corporate involvement” in the overall development of St. Maarten. The acting governor was also “elated to learn” that Dr. Peterson has St. Maarten roots – his grandfather was from Simpson Bay – and was proud that a “small island like St. Maarten can produce human resources of such a caliber”.

“If we study the numbers of the Chamber of Commerce we have no lack of corporations on the island,” the prime minister said, “there are many, big and small, that are active and not so active in the social arena. And so today, as we look at that responsibility of cooperation on St. Maarten, the question I would like to hear addressed would be the one asking specifically what drives the feeling of social responsibility of cooperation right here on St. Maarten.” The prime minister further stressed that “it is important as we look at that responsibility of corporate citizens, that we look at it in the bigger picture of the development of St. Maarten and the contribution of everyone to that development” and that the private sector “has a very important role to play in the establishment of the National Development Plan. A plan where no one can be left behind and one in which all have a role to play.”

SER chairman Rene Richardson kept his remarks brief. “Business and citizens play a role in society,” not only government. St. Maarten experienced explosive economic growth during the last four decades, he said, but further growth should not come at a social cost. The SER, therefore, was established to “reconcile economic growth and quality of life” through its advice to government. He emphasized the importance of the structure of the organization’s board. Chairman Richardson concluded by listing upcoming publications and advised stakeholders not to “read just a few lines in the advice, but read the whole thing.”

Dr. Peterson set the stage for his presentation by asking some simple questions. “How do islands develop? How do institutions affect development?” and “what role do they play in islands?” The professor argued that “solid institutions are fundamental, without such they (islands) do not forward.” However, “values and norms also play a role, not only formal institutions” in the development of island society. “Corporate Social Responsibility,” or CSR, “has a positive impact on the financial performance of companies” and also “at the macro level”, having a positive effect across a society as a whole.

With tourism the lifeblood of the islands, Dr. Peterson said that economic growth should not come at the expense of environmental and social wellbeing because “quality of life impacts tourism.” Many companies, however, are merely superficially eco friendly, he added, for shallow PR purposes.”We need corporations to make donations, but much more than donations are needed.” If islands are to welcome foreign investment, it should be from corporations that are highly ranked according to their social responsibility, not merely “shell companies laundering money or other illegal activities.” He stressed that gender equity is also a key component of CSR.

The “old economics focused on profit only,” the professor said, while the new view is wider, more comprehensive in scope. CSR is essentially about managing relationships in ever widening circles. “A risk mitigation approach is now more common, especially after the financial crash of 2008. It’s no longer business as usual.” Increasingly, corporations are seeking “win-win situations” in which everyone benefits.

CSR, however, is not widely practiced across the Caribbean. Corporations among the islands “are still in the old economic mindset, trying to make ends meet” as profitability for them becomes harder to achieve since labor productivity has been dropping steadily across the region over the past years, the professor pointed out. The islands face huge problems such as brain drain to the US and Europe, and rising youth unemployment. To offset this, “more investment is needed in the youth and education to boost productivity,” retooling the younger generation with the skills required of a new millennium. Few Caribbean companies “have a structural CSR approach.” Much of their CSR depends on the character and whims of management, and is reactive, not proactive.

And “environmental responsibility is still not seen as priority in the Caribbean. Companies often respond in an ad hoc, unstructured way” to social issues, and many find it “easier to work without government, than with them.” The professor highlighted that “trust is important. If companies don’t trust their governments, economic deterioration sets in.” The remedy is that the “community, too, needs to become educated on being more responsible. And until companies still operate in the old, reactive mindset, there will be little innovation.

Dr. Peterson also discussed the important role of the media in shaping society, especially the new social media generation of “Facebook journalists”, who can instantly scandalize corporations and governments acting in unethical ways.

He wrapped up his presentation by stating that islands with higher CSR outperform islands with lower levels, and repeated his warning about declining labor productivity across the Caribbean which can have dire social and economic consequences in the near future.

With that the symposium switched to an open floor where the audience challenged the assembled panel on various social and economic issues. The panel included Dr. Peterson, SER Chairman René Richardson, Robbie Ferron, Harbor CEO Mark Mingo, and secretary of the Voice of Our Children Foundation Lucrecia Lynch. The greater challenge, however, is how such a symposium actually transforms from talk into concrete action with measurable results.